Below is an email which covers many queries regarding the forthcoming sale of the property holding in the Mansion Student Accommodation fund, and the subsequent redemption of units to investors.
We are aware that a number of our clients do hold capital in this fund, where they were advised to invest into this fund via other financial firms in previous years.
Should you have any queries with regards to the contents of the email below please do not hesitate to contact us.
Kind regards,
Andrew Brace
Senior Partner
+351 91 000 6661
andrew@privatefund.management
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Following the announcement confirming the sale of Project Ardent portfolio, and the subsequent circular, EGM Notice and Memorandum and Articles of Incorporation issued to Mansion shareholders on the 8th March, please find the link and below the FAQ's in relation to this issued by Active Fund Services:
Frequently Asked Questions
The announcements released earlier this week by the Fund following the sale of its assets have prompted various further enquiries from Shareholders and Financial Advisers. Please find below the Fund’s response to these “Frequently Asked Questions”, which we trust will provide you with some further clarification.
1. Which forms need to be completed and returned? There are 3 forms which all need to be completed in respect of each Shareholding:-
A completed Form of Proxy for the Extraordinary General Meeting (“EGM”) of TIMF (detailing how you wish to vote)
A completed Form of Proxy for the Cell Meeting of the Cell/s specific to your investment/s (detailing how you wish to vote)
A completed Payment Instruction Form (confirming bank details held on file or providing certified updated bank details, and to record personal details of Shareholders (or underlying beneficial owners if applicable) so as to satisfy reporting requirements in respect of recently introduced taxation legislation)
We would like to remind Shareholders that the Board of the Fund is unanimously recommending that you vote in favour of the Proposals set out in their letter dated 8 March 2016 in respect of both the EGM of TIMF and the Cell Meetings, and that it is important that all Shareholders complete and return their votes in respect of both.
2. I am invested through a Third Party Company (e.g. via portfolio bonds, a life company or a pension scheme). Do I have to take any action, and am I required to complete and return the relevant forms?
In these cases, the forms must be completed by the registered Shareholder (i.e. through the Third Party Company), not by the underlying investor. Votes and payment instructions received from anyone other than the registered Shareholder cannot be accepted or acted upon. We would recommend that you speak to your IFA and/or the Third Party Company to ensure that the Third Party Company is aware of how you wish to vote (and instruct them to complete the Forms accordingly in respect of your investment and return them to the company secretary).
3. What happens if the TIMF EGM is not passed?
If the TIMF EGM is not passed (i.e. it is voted down), the Cell Meetings fall away. The resolutions at the Cell Meetings are expressly conditional on the TIMF EGM special resolution having been passed. It is possible that the TIMF EGM is not quorate at the first meeting and needs adjournment, and in such circumstances the Cell Meetings would be adjourned too.
4. I have previously placed a redemption instruction. What happens to it if the Windingup Option is passed?
If the Cell Meetings vote to pass the Wind-up Option, these instructions will fall away as no redemptions will take place.
5. Is there any difference between the potential Net Asset Value (“NAV”) under the Winding-up Option in comparison to that under the Redemption Option?
There should not be any material difference between the two, as the process and therefore the costs are similar for both. The primary difference relates to the timing of the release of monies. Under the Winding-Up Option, it is expected that a substantial interim payment of approximately 85% of the assets would be able to be made to Shareholders around 10 Business Days following the Cell Liquidator’s appointment, whereas the Redemption Option requires finalisation of the reconciliation process in order to strike an accurate NAV which is expected to take just over six months.
6. What is the timetable for the liquidation?
And how much will it cost? The Cell Liquidator would need to finalise various arrangements within the sale agreement, finalise creditors and liabilities, and complete the reconciliation process, which the Fund Board believe will take just over six months. The Cell Liquidator's fees would be time based (with a minimum fee of £20,500), and their overall fee will thus depend on their level of involvement in the post-disposal reconciliation process. The Cell Liquidator would also agree any further fees payable to service providers as deemed reasonable and necessary in order to achieve the winding up.
7. Are there any potential liabilities or further monies to be received by the Fund?
The extent of the currently outstanding creditors and liabilities will be finalised within the post-disposal reconciliation process. At present, creditors currently exceed 1% of the value of the Fund, and the accurate collection and reconciliation of these outstanding amounts is therefore fundamental to ensuring that an accurate value is passed on to the Shareholders.
8. What is the mechanism for appointing the Liquidator?
The Cell Liquidator, KRyS Global (Guernsey) Ltd, has already been chosen by the Fund Board, as indicated in their letter dated 8 March 2016, following a bidding process of four potential candidates. The Board took into account the quality of the potential liquidators, their available resources, technical ability, costs and the speed with which they could deliver.
Following this assessment the Board decided to use KRyS Global, who are an international specialist in liquidation procedures and asset tracing. They have a Guernsey office, one of many worldwide, and therefore understand the offshore environment in which the Fund operates and are known to the local Regulator and Custodian. However, please note that the Cell Liquidator will only be appointed should the Cell Meetings resolve in favour of the Winding-up Option.
9. Will the various Advisors’ agreements be terminated?
As advised in the Fund Board’s letter of 8 March 2016, the relationship between the Fund and The Mansion Group Limited (whose wholly-owned subsidiaries provided a number of services) has been brought to an end by mutual consent. Should the Winding-up Option be passed, it is anticipated that the Cell Liquidator will renegotiate with certain other Advisors should they require their assistance in the reconciliation process. These negotiations are currently underway in preparation for the EGM and Cell Meeting results so as not to hold up the progress of the reconciliations and the facilitation of the distributions.
10. Why did you not publish the sale price?
The Fund was bound by the confidentiality clauses of its agreement with the buyer, who did not want the price published. Of more importance to Shareholders is how the sale price has affected the NAV. Current estimations are that the final value to be achieved will be slightly below the published indicative January 2016 NAV as a result of the costs associated with the sale, but this can only be confirmed once all the post-disposal reconciliation process has been finalised in approximately six months’ time.
11. I invested through a Feeder Cell. Will I suffer a Deferred Marketing Charge and Exit Fee?
If the Cell Meetings vote to pass the Wind-up Option, these fees will not be charged as no redemptions will take place. However, should the Redemption Option be followed, then these fees will apply as per the terms of the Scheme Particulars.
12. Were all the assets sold?
All the assets have been contractually sold. The sale has duly completed in relation to all but one of the properties, where the contract remains in place but completion delayed because as it is leasehold, it has been necessary to apply to the freeholder for consent. That consent did not arrive in time for initial completion. Once the freeholder permission is received, the purchase monies relating to that asset will be released from the buyer to the Fund. A time limit or time frame cannot be placed on this as it is dependent entirely on the speed with which the freeholder responds, but the Fund and its lawyers are actively engaging with the freeholder to issue consent expeditiously.
